Inequality in Equal Land
Adam Nash has a good post on wealth inequality: …Every year, we pull the most recent data from the US Census on household wealth, cut by age. …invariably, the students’ initial response is a reaction to the apparent disparity in wealth between households based on age. For many students, it just doesn’t seem fair at […] The post Inequality in Equal Land appeared first on Marginal REVOLUTION .
Adam Nash has penned an insightful piece on wealth inequality, analyzing data from the US Census on household wealth, broken down by age. Upon initial observation, students are often taken aback by the stark disparity in wealth between households aged 65 to 69, which holds a median net worth nine and a half times greater than that of households under 35.
The strong reaction to the perceived unfairness of the Baby Boomers hoarding all the wealth is understandable. However, the majority of the graph is dominated by the aging population. Nash envisions an ideal society dubbed "Equal Land" where, everyone works from ages 25 to 64, retiring at 65. In this hypothetical world, everyone lives to be 85, earning a fixed annual income of $100,000, saving 10% of their earnings each year, experiencing an 8% return on their savings, and spending 4% of their portfolio annually during retirement.
In Equal Land, the wealth distribution by age becomes even more pronounced than in our current reality. While age is not the sole determinant of inequality in our world, it plays a significant role, with most inequality observed within specific age groups rather than between them.
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